The Government Accountability Office (GAO) is recommending that the Department of Interior take steps to improve oversight of idled and terminated offshore oil and gas lease infrastructure to better protect against billions of dollars in federal exposure to decommissioning liabilities. In the report (GAO-16-40), GAO recommended several steps to improve the data system, complete plans to revise its financial assurance procedures and revise cost reporting regulations, among other things. Interior concurred with the recommendations. Among other things, Interior’s Bureau of Safety and Environmental Enforcement should establish documented procedures to identify and track the idled infrastructure, the report said. To better ensure the government obtains sufficient financial assurances to cover decommissioning liabilities in the event of a default, Interior also needs to ensure that BSEE collect relevant data from the lessees. The report also recommended that Interior develop a plan and set a time frame to ensure the data system for managing offshore activities includes ways to accurately record estimated liabilities.
State leaders in Hawaii set a goal to use 100% renewables by 2045, but liquefied natural gas (LNG) may be a viable and cost-saving supplement to the use of synthetic natural gas (SNG) by Hawaii Gas as a primary fuel in the interim, according to the results of an 18-month bidding process by the state’s only regulated gas utility. Natural gas may be a lower-cost substitute for the company’s SNG as well as a cheaper and cleaner alternative to the oil-based fuels used by electricity producers and ground/marine transportation operators, said a Hawaii Gas spokesperson said when the report was released. “The Facts About LNG for Hawaii” follows five years of discovery work by the Macquarie Infrastructure Co. utility. The only way to bring large quantities of LNG to the islands is for a third party to own and operate a floating storage and regasification unit, Hawaii Gas said.
The boards of the Center for Liquefied Natural Gas (CLNG) and the Natural Gas Supply Association have approved and implemented the merger of the two trade associations, and appointed a former America’s Natural Gas Alliance (ANGA) executive to head the combined organization. NGSA and CLNG announced plans for the merger last May (see Daily GPI, May 8, 2015). Following the combination, both organizations would retain their brands, they said. Charlie Riedl, who was most recently director of Market Development for ANGA, has been named executive director of CLNG and will also serve as a senior vice president of NGSA. NGSA represents integrated and independent companies that supply natural gas, encouraging the use of gas within a balanced national energy policy and promoting the benefits of competitive markets. CLNG is a trade association of LNG producers, shippers, terminal operators and developers, and energy trade associations.
ExxonMobil Corp.‘s XTO Energy Inc. sued the U.S. Department of Justice (DOJ) to force federal officials to release documents that could clear the producer of eight criminal environmental charges filed in 2013 in Pennsylvania. In 2010, more than 50,000 gallons of wastewater were discharged at XTO’s Marquardt development in Lycoming County, where two natural gas wells were being drilled. The incident was found to be caused by an open valve on a wastewater storage tank, which ExxonMobil said was an accident. Following an investigation by the U.S. Environmental Protection Agency (EPA) and Justice Department, ExxonMobil entered into a consent decree, agreeing to pay a $100,000 penalty and spend up to $20 million in a settlement (see Shale Daily, July 22, 2013). No criminal charges were filed and the producer admitted no wrongdoing. Two months after the federal settlement and following a Commonwealth grand jury investigation, the Pennsylvania attorney general charged XTO with unlawful conduct, including five criminal counts under the state’s Clean Streams Act and three under the Solid Waste Management Act (see Shale Daily, Sept. 12, 2013). A pretrial conference before Judge Christopher Conner tentatively is scheduled Feb. 2 (see Shale Daily, Oct. 26, 2015). XTO in November 2014 subpoenaed documents from DOJ used in the federal investigation to help it in the Commonwealth case, but federal officials have refused to comply with the request, according to the lawsuit filed in U.S. District Court for the Middle District of Pennsylvania (XTO Energy Inc. v. U.S. Department of Justice et al, No. 1:16-cv-00077). The lawsuit also names Peter J. Smith, U.S. attorney for the Middle District of Pennsylvania.
American Energy Partners LP (AELP), the company formed by Aubrey K. McClendon three years ago, is taking its unconventional expertise south with an investment in Argentina’s Vaca Muerta formation in a partnership with state-controlled producer YPF SA. The companies over the next three years plan to invest more than $500 million in the Nuequen Basin project. Under terms of the tentative agreement, AELP is farming into two blocks in the Vaca Muerta and would pay pay partial development costs to earn stakes in the unconventional play. One project consists of launching a shale oil and gas development pilot in the Bajada de Anelo block, covering about 55,500 acres. After the first phase is completed, expected by mid-2018, the project would begin full field development. YPF and an affiliate of AELP, in partnership with Pluspetrol and Gas y Petroleo de Neuquen, also plan a second project to delineate shale gas resources in the southern portion of the Cerro Arena block, covering 92,600 acres.
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